WASHINGTON — The director of the nonpartisan Congressional Budget Office said Thursday that permanently extending tax cuts put in place under President George W. Bush would provide a “considerable” economic boost over the next several years but would result in substantial increases in the federal deficit, placing the country in a precarious fiscal situation by 2020.
In offering this assessment, Douglas Elmendorf underscored the difficult choice facing lawmakers as they debate whether to extend any or all of the tax breaks, which are scheduled to expire at the end of the year.
The CBO’s analysis was part of a broader report released Thursday in which the agency projected that the federal government’s budget deficit for this year would be $1.34 trillion. The figure is slightly below last year’s total, but the CBO warned that policymakers face “daunting” challenges in the years ahead in trying to return the country to fiscal sustainability.
The Obama administration and Democratic leaders in Congress are seeking to extend tax cuts for Americans earning less than $250,000 a year, while letting expire some of those for wealthier individuals. The Washington Post
